Crude and product prices plunge in Singapore
Crude and product prices plunge in Singapore
SINGAPORE (Reuter): Crude oil and product prices in Singapore
plunged early yesterday, reflecting the erosion in the West, but
traders said well-supported fundamentals in Asia will limit any
downside potential in prices.
"Prices are down because of the sharp sell-off on NYMEX (New
York Mercantile Exchange)," an oil trader said. "But their
downside will be limited because fundamentals in the East are
still well-supported.
"We could see a drop of about 50 cents per barrel on gas oil
but I certainly don't expect more than US$1 erosion."
Crude oil and product prices on NYMEX plunged on Thursday
following a breach of key technical support levels, triggering
massive liquidations of long positions held by fund managers over
the past three months.
February West Texas Intermediate crude fell 88 cents to $18.79
per barrel and continued to trade four cents lower on NYMEX
ACCESS.
As a result, February Brent crude on the Singapore
International Monetary Exchange (SIMEX) was bid/asked at
$17.80/$17.90 per barrel early yesterday, down at least 62 cents
from its previous close.
The Singapore swap products market saw active trade on profit-
taking interest, with February done at $24.50, $24.55 and $24.60
a barrel, almost $1 below Thursday levels. Sellers dominated the
market.
High sulfur fuel oil saw offers only, with second-half January
at $116, February at $110 and March at $104 per ton, all down
around $2 from overnight.
Naphtha fell between 55 and 85 cents to $17.20/17.60 per
barrel.
Supplies
Traders here felt prices might rebound late yesterday after
the panic subsides as fundamentals retake center-stage.
"What happened in the West was technically-driven," an oil
trader said. "In Asia, it is not the same. We do not have the
large numbers of fund managers that are long and the East is
generally a fundamentally-driven market."
Traders added supplies of gas oil, jet kerosene fuel and the
residual fuels were tight and regional demand for these products
remained strong, notably from India and Indonesia.
India was widely expected to buy at least 850,000 to one
million tons of gas oil in its tender for March deliveries.
Indonesia was estimated to need at least 1.8 million barrels
of gas oil and about 800,000 tons of jet kerosene fuel in
February.
"None of them has covered their demand yet." the oil trader
said. "Regional supply will stay tight. There is a lack of
available vessels to bring cargoes from Europe to Asia and the
earliest any cargo can arrive will be late February."